Economy Watch: Economic Activity Grows Modestly, But Wages Are Up

The Fed's latest Beige Book reported only moderate economic growth nationally, but commercial real estate activity is up in most districts.

moneyNational economic activity continued to expand at a “modest pace” from July through late August, according to The Federal Reserve’s latest Beige Book—formally called the Summary of Commentary on Current Economic Conditions by Federal Reserve District.

Also, most Federal Reserve districts reported a “modest” or “moderate” pace of overall growth. Those are among the central bank’s favorite terms to describe growth, and while vague, it seems to indicate growth better than the lull right after the recession, but not particularly robust (and one could argue that the U.S. economy really hasn’t been robust since the 1990s.)

One bit of good news, at least for prospective consumer spending: Labor market conditions remained tight in most districts, with moderate payroll growth, the book reported. Upward wage pressures increased further, with more rapid gains reported for workers with selected specialized skill sets. Price increases remained slight overall.

Commercial real estate activity expanded further in most districts, the report said, with construction and sales rising only slightly in the Boston, Kansas City and St. Louis districts, but growing at a faster clip in Cleveland and Dallas (though it’s worth noting that the territory of the districts is usually larger than the cities they’re named for.1) Commercial leasing activity strengthened in New York, Richmond, Va.,and San Francisco, but grew at a softer pace in Philadelphia, where the report described the market as in a “lull, not a retreat.”